London, February 29, 2024 (Reuters) – According to a Reuters survey on Thursday, the Organization of the Petroleum Exporting Countries (OPEC) observed a rise in oil production for the month of February. This increase, primarily attributed to the recovery in Libyan production, offset the impact of voluntary cuts agreed upon by other members within the broader OPEC+ alliance.
The survey indicated that OPEC collectively pumped 26.42 million barrels per day (bpd) this month, marking a 90,000 bpd uptick from January. A substantial portion of this increase can be attributed to Libya, with its output rising by 150,000 bpd on a month-on-month basis.
Libya, as one of the OPEC members not obliged to restrain output, experienced the most significant surge in production. The reopening of the Sharara oilfield, one of the country’s largest, following a period of unrest, played a pivotal role in this boost.
Despite the efforts of some OPEC+ members to implement new cuts in January to counter economic challenges and increased supply outside the group, OPEC fell short of its targeted cuts by 190,000 bpd in February. This shortfall was largely attributed to Iraq, Nigeria, and Gabon, which exceeded their production targets, resulting in an additional 20,000 bpd cut compared to January.
While Gulf producers Saudi Arabia, Kuwait, and the United Arab Emirates maintained slightly lower output than their voluntary targets, Algeria also adhered to this trend. Iraq, although still exceeding its target, made a cut of 30,000 bpd in February.
Iran, exempt from production quotas, continued to lower exports, maintaining a level near the five-year high reached in November. This is noteworthy, considering Iran’s significant output increase in 2023, despite ongoing U.S. sanctions.
Nigeria recorded the second-largest gain in output, with an increase of 60,000 bpd, attributed to the processing of crude in the new Dangote refinery and a rise in exports. However, the country’s output remained 100,000 bpd above its 2024 target.
The upcoming days are crucial, as producers are expected to decide whether to extend the voluntary cuts beyond the first quarter. The Reuters survey, aiming to monitor supply to the market, relies on shipping data, LSEG flows data, information from companies tracking flows (such as Petro-Logistics and Kpler), and insights from sources at oil companies, OPEC, and consultants.